Going From A Crisis To A Competition

How the US turned around its manufacturing sector

By Mark Howard

Even though the US economy is the largest in the world by nominal GDP, it was a crisis in the manufacturing sector that prompted the US Government to act to save the industrial sector over the last decade. Here, Mark Howard, United States country manager at EU Automation, investigates how the US has turned it around.

On the face of it, the US manufacturing sector accounts for 11.6
per cent of GDP, employs over 12m people and makes up two thirds of all
exports. Look below the surface, however, and the economy hasn’t always been as
healthy. From about 1980 to 1985, and then again from 2001 to 2009, the US
experienced a greater decline in manufacturing jobs even than that experienced
during the Great Depression.

According to the Information Technology & Innovation
Foundation in the US, it is estimated that between a third of all manufacturing
jobs were lost between 2001-2009.

The manufacturing crisis has been attributed to a variety of
causes, from an annual trade deficit, a reliance on outsourcing and the growth
of domestic industries such as finance, construction, real estate and services.
However, probably the biggest reason for many is China’s meteoric rise
following its entry into the World Trade Organisation (WTO) in 2001, which MIT
economists have directly attributed to the loss of 560,000 American jobs.

Manufacturing USA

Having stemmed the loss of manufacturing jobs, the US has more
recently engaged in a programme to better position the industry to face the
challenge of advanced manufacturing in the 21st Century.

On January 15, 2014, the then-president Obama gave a speech at
North Carolina State University, where he set out his vision of a new phase of
manufacturing innovation. In it, he talked about Manufacturing USA, the brand
name for a policy initiative called the National Network for Manufacturing
Innovation (NNMI).

The NNMI is a network of 14 research institutes designed to foster
the improved design, development and commercialisation of innovative new
manufacturing technologies. The institutes are located in regions around the US
making the best use of the local skills and resources available and
concentrating research in a specific area.

The Manufacturing USA programme is administered by the interagency
Advanced Manufacturing National Program Office (AMNPO), which works in
partnership with the Department of Defense, the Department of Energy, NASA, the
National Science Foundation and the Departments of Education, Agriculture,
Health and Human Services (HHS) and Labor.

Some of the institutions have a greater focus on digital
technologies than the others. For example, the Advanced Robotics Manufacturing
(ARM) Institute was established to, “develop, demonstrate and accelerate the
early adoption of novel robotic solutions.” Its four overarching goals are
focused on empowering American workers to compete with low-wage workers abroad;
helping the creation of new jobs to secure US national prosperity.

Another, the DMDII, is the hub for digital manufacturing and
design innovation. In a promotional video outlining the institution’s work,
Caralynn Nowinski Collens, managing director of the DMDII says, “We’re the
place where companies of all sizes meet up with innovators to plot the future
of manufacturing. This is where you take things like data and artificial
intelligence and the Internet of Things and piece it all together to figure out
how we can advance an entire industry.”

To achieve this, the institution has four ‘technology thrust
areas’. The first is called Design, Product Development and Systems
Engineering; the second is called the Future Factory; the third looks at
creating agile, resilient supply chains; and all of this is underpinned by a focus
on cybersecurity in manufacturing.

The programme is making quick progress. An independent assessment
of Manufacturing USA by professional services firm Deloitte found that the
first eight institutes, established between 2012 and 2016 have, “reached a critical
mass of valuable connections among participating companies, universities, and
other entities.”

The network now has 830 industry members, two-thirds (548) of
which are manufacturing firms, including 361 small businesses. The network has
delivered, or is working on delivering, around 200 major applied research
projects, which have reached out to 28,000 people including students from
twelfth grade to university, as well as manufacturing employees and veterans.

Despite the successes, the U.S. still has challenges ahead in the
journey to digitalisation and initiatives such as Manufacturing USA are going a
long way towards solving these. But, considering the success of the last
decade, what could be in store for the next?

This article is an extract form 4.0Sight, a
publication by EU Automation on the state of industrial digitalisation around
the world. Make sure you order your copy of 4.0 Sight at www.euautomation.com/4sight.